Sony Ericsson Kicks Off Playstation Phone at Super Bowl (SNE, ERIC, GOOG, AAPL)

The joint venture between Sony Corp. (NYSE: SNE) and L.M. Ericsson Telephone Co. (NASDAQ: ERIC), aptly called Sony Ericcson, tantalized gamers with a commercial during yesterday’s Super Bowl for a device everyone’s been calling the Playstation Phone, but that the company has labeled the Xperia Play. The ad is short on detail and long on mood, but now that Sony Ericsson has finally revealed the device, will anyone care?

Sony had better hope so. Single-purpose devices like the company’s Playstation Portable are being replaced, like so many other devices, by increasingly sophisticated and multi-purpose smartphones. The Xperia Play replaces a slide-out keyboard with a slide-out game controller. The new device uses the Android operating system from Google Inc. (NASDAQ: GOOG), and like every other smartphone, hopes to cut into the market-leading mind share that belongs to Apple Inc. (NASDAQ: AAPL) and its iPhone.

Sony Ericcson is scheduled to launch the Xperia Play at the Mobile World Congress next week in Barcelona. That’s when the company gets to show off what the device can do. And what it can do had better be thrilling or else the phone/game controller will land with a thud.

What we expect is a full-featured Android phone, or as Sony Ericsson puts it, “the smartphone with everything you need.” The company also promises to deliver “the one thing you want.” Presumably that is the game controller.

The Experia Play is the first handset to meet a set of Sony standards called ‘Playstation Certified’, which is aimed at allowing Android-based handsets to play old Playstation games on mobile devices. But competition from inexpensive or free games already available on Android and Apple platforms could negate the impact of compatibility with Playstation games, unless the Sony games are available equally cheaply.

That’s really the nub of the issue. Is Sony willing to cannibalize its handheld game controller business in a move to own the smartphone/gamer market? Even if it is, is the market for the Xperia Play large enough to warrant ditching the Playstation?

Depending on how encompassing the ‘Playstation Certified’ standards are, that could help sales. Playstation users who purchased Sony’s Playstation Go device had to buy new versions of games. If that happens again, the Xperia Play faces an uphill struggle for sale.

Also, Sony Ericsson has said nothing about cost. The Playstation Go costs around $225 and to that would be added the cost of the phone component. It’s hard to see the device coming in at less than $450-$500.

If the Xperia Play had been available for the holiday season, it might have had a chance at a better start. Being several months late will not help.

The one conclusion that can be drawn from the name of the device is that Sony did not allow the smartphone/game controller to use the name Playstation. Of all the things that Sony could have given Sony Ericsson, that brand was probably the most important. Now, the company will have to explain all about how Playstation games run on Xperia play, blah, blah, blah. The market moves too fast for an educational campaign. By the time everyone figures out what Sony Ericsson has released, the next big thing will already be grabbing the headlines.

Paul Ausick